Refuel has grown via acquisitions since First Reserve bought in 2019
Company owns around 230 stores, mainly in Carolinas
Convenience-store industry consolidating amid slowing growth and inflation
By Abigail Summerville and David French
Nov 8 (Reuters) - The private-equity owner of Refuel is exploring strategic options including a potential sale that could value the U.S. convenience-store operator at more than $1.5 billion including debt, people familiar with the matter said on Friday.
The move comes as a wave of consolidation rolls through the convenience-store industry.
Some store operators are looking to expand geographically, even as the sector copes with slowing growth. Inflation has forced shoppers to cut back spending on groceries and staples.
Private-equity firm First Reserve, which acquired Refuel in 2019, is in talks with investment bankers to launch a sale process for the convenience-store operator in the first half of 2025, the sources said, requesting anonymity as the discussions are confidential. Potential buyers include other store operators and buyout firms, the sources said.
Based on comparable transactions in the sector, Refuel could command a valuation equivalent to about 13 times its core annual earnings of roughly $120 million, the sources said, cautioning a deal is not guaranteed and First Reserve may keep the business.
First Reserve and Refuel declined to comment.
Charleston, South Carolina-based Refuel owns around 230 convenience stores and gas stations, mainly in North Carolina and South Carolina as well as other states, including Mississippi, Arkansas and Texas, according to its website.
Under the ownership of First Reserve, which mainly focuses on investing in the energy sector, Refuel has grown through acquisitions of other store operators and family-owned convenience stores.
In January 2022, First Reserve said it had moved its Refuel investment into a continuation fund, which allows buyout firms to continue owning an asset beyond its traditional lifespan. This structure also allowed Refuel to attract funding from new investors.
Refuel's deliberations on a potential sale mirror moves from other store operators.
Reuters reported in September that Arko ARKO.O was seeking to shed its convenience-store operations in a deal that could be valued at around $2 billion. This year, Sunoco SUN.N agreed to sell 204 stores to 7-Eleven in a deal worth $1 billion.
In July, Casey's General Stores CASY.O struck a $1.15-billion deal to buy Fikes Wholesale, the owner of CEFCO convenience stores, to expand in Texas.
(Reporting by Abigail Summerville and David French in New York; Editing by Rod Nickel)
((davidj.french@thomsonreuters.com;))
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